Nevada and Arizona Governors Call on Newsom to Reconsider His Proposal for Oil Refiners
Arizona Governor Katie Hobbs, a Democrat, collaborated with Republican Governor Joe Lombardo to express concerns regarding costs.
TroibNews 
SACRAMENTO, California — Arizona Gov. Katie Hobbs and Nevada Gov. Joe Lombardo expressed their concerns in a letter sent to California Gov. Gavin Newsom on Tuesday, urging him not to hasten the implementation of new storage requirements for California oil refiners. They worry that these requirements could lead to increased costs in their states.
The letter is a response to an Assembly proposal backed by Newsom, which aims to empower the California Energy Commission to mandate that refiners hold more gasoline in reserve, intending to prevent price spikes linked to shortages.
After the California Legislature rejected the proposal during the final days of its regular session, Newsom convened a special session on August 31 to revisit the issue.
The governors from neighboring states emphasized the political implications of Newsom’s efforts to combat the gas price spikes that have occurred over the past two years, particularly as high gas prices in California could be leveraged against state Democrats during the presidential election.
In their letter, the governors highlighted that “mandating refinery inventory would directly raise the cost of fuel for all of our constituencies and create further economic instability in the region.” They pointed out the refiner concerns that such requirements might lead to shortages by restricting supply to maintain the required reserves, and referenced a California Energy Commission letter indicating that the supply mandate carries the risk of shortages.
“The people of Nevada and Arizona shouldn’t have to foot the bill for California’s misguided policies,” Lombardo stated on X.
"Arizonans are struggling with the high cost of living, we can’t afford yet another price hike," Hobbs added.
Newsom has been tackling the issue of rising gas prices since the fall of 2022, when prices in California surged to an average of $6.44 per gallon. In December of that year, he called for a special session resulting in legislation that instructed the CEC to analyze gas prices and consider capping the profits of refiners.
In January of this year, the agency proposed new supply requirements and suggested additional regulations concerning oil spot markets, where prices are determined.
Most of the Assembly Democratic Caucus only encountered the proposal's language two weeks prior, with limited time to pass it. Moderates raised alarms about the timeframe and the potential for unintended consequences, prompting Newsom to call another special session—an idea supported by Assembly Speaker Robert Rivas but not by Senate President Pro Tem Mike McGuire.
Lombardo had previously voiced concerns in May regarding the CEC's proposed regulations, which drew a forceful rebuttal from Newsom, whose spokesperson called it a “stunt” meant to please “Big Oil donors.”
The involvement of a Democratic governor like Hobbs may complicate Newsom's political maneuvers further. The governor’s office has yet to respond to requests for comments.
The first hearing of the special session is set for September 18.
Navid Kalantari contributed to this report for TROIB News
The letter is a response to an Assembly proposal backed by Newsom, which aims to empower the California Energy Commission to mandate that refiners hold more gasoline in reserve, intending to prevent price spikes linked to shortages.
After the California Legislature rejected the proposal during the final days of its regular session, Newsom convened a special session on August 31 to revisit the issue.
The governors from neighboring states emphasized the political implications of Newsom’s efforts to combat the gas price spikes that have occurred over the past two years, particularly as high gas prices in California could be leveraged against state Democrats during the presidential election.
In their letter, the governors highlighted that “mandating refinery inventory would directly raise the cost of fuel for all of our constituencies and create further economic instability in the region.” They pointed out the refiner concerns that such requirements might lead to shortages by restricting supply to maintain the required reserves, and referenced a California Energy Commission letter indicating that the supply mandate carries the risk of shortages.
“The people of Nevada and Arizona shouldn’t have to foot the bill for California’s misguided policies,” Lombardo stated on X.
"Arizonans are struggling with the high cost of living, we can’t afford yet another price hike," Hobbs added.
Newsom has been tackling the issue of rising gas prices since the fall of 2022, when prices in California surged to an average of $6.44 per gallon. In December of that year, he called for a special session resulting in legislation that instructed the CEC to analyze gas prices and consider capping the profits of refiners.
In January of this year, the agency proposed new supply requirements and suggested additional regulations concerning oil spot markets, where prices are determined.
Most of the Assembly Democratic Caucus only encountered the proposal's language two weeks prior, with limited time to pass it. Moderates raised alarms about the timeframe and the potential for unintended consequences, prompting Newsom to call another special session—an idea supported by Assembly Speaker Robert Rivas but not by Senate President Pro Tem Mike McGuire.
Lombardo had previously voiced concerns in May regarding the CEC's proposed regulations, which drew a forceful rebuttal from Newsom, whose spokesperson called it a “stunt” meant to please “Big Oil donors.”
The involvement of a Democratic governor like Hobbs may complicate Newsom's political maneuvers further. The governor’s office has yet to respond to requests for comments.
The first hearing of the special session is set for September 18.
Navid Kalantari contributed to this report for TROIB News
